The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country.Actually, the failing retailers are not as diverse as the NYT would have you believe. Instead they all share (or rather lack) one rather important attribute: none of them sells anything that people have to buy new. Think about it. You can't buy used gasoline or food, right? You have to buy those from a store that sells them new. But the nation is absolutely stuffed with rental garages just bulging with all the household crap we have already bought, can't use, but could re-sell. How much new furniture is being purchased today with the housing market in depression? Not enough to keep the doors open, apparently.
Since last fall, eight mostly midsize chains — as diverse as the furniture store Levitz and the electronics seller Sharper Image — have filed for bankruptcy protection as they staggered under mounting debt and declining sales.
But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week...
It's only going to get worse as our sad sack money continues its descent to worthlessness, because as that money is more and more dedicated to food and gas and taxes, more and more of that stored-up junk will hit the market. Garage sales are about to thrive, not only because people are not going to want to buy things new, but they are not going to want to pay to store crap they will realize they not only don't need, but never needed. They'd rather spend that money on food.
That means useless companies that sell useless products will continue to go out of business, which means more layoffs, which means less money* to spend. To keep the game going the government will be forced to carry out more helicopter drops; after all, the business of America is shopping.
But even the government can't make people play the game once they decide, at long last, that it really wasn't all that much fun anyway.
* Which might properly be called deflation, but will in all probability not have the kinds of deflationary effects prevalent in the last deflationary depression. FDR could not break the dollar; Bush has already done so.